Invesco Mortgage Capital Reports Significant Profit Turnaround in Q3 2024

Invesco Mortgage Capital Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company, which focuses on investing in and managing mortgage-backed securities (MBS) and other mortgage-related assets, experienced a notable turnaround in profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, Invesco reported a net income of $40.7 million, a substantial recovery from a net loss of $68.6 million in the same period of 2023. This improvement was driven by net gains on investments totaling $165.2 million, contrasting sharply with net losses of $224.9 million in the prior year. The net income attributable to common stockholders for the same quarter was $35.3 million, compared to a loss of $74.0 million in Q3 2023, resulting in earnings per share of $0.63, up from a loss per share of $1.62.

For the nine months ended September 30, 2024, the company reported a net income of $56.4 million, a significant improvement from a net loss of $43.1 million in the previous year. Net income attributable to common stockholders for this period was $40.2 million, compared to a loss of $59.8 million in 2023, with earnings per share rising to $0.78 from a loss of $1.40.

Despite these gains, net interest income declined, with $7.5 million reported for Q3 2024, down from $9.4 million in Q3 2023. For the nine-month period, net interest income was $23.1 million, a decrease from $41.4 million in the prior year. The decline was attributed to lower average earning asset yields and increased borrowing costs influenced by changes in the Federal Funds target rate.

The company’s total assets as of September 30, 2024, stood at $6.1 billion, with total liabilities of $5.2 billion, resulting in stockholders' equity of $857.0 million. Cash and cash equivalents decreased to $48.3 million from $359.7 million a year earlier.

Strategically, Invesco has been active in managing its capital structure, repurchasing and retiring shares of preferred stock, including 138,008 shares of Series B and 267,916 shares of Series C during the nine months ended September 30, 2024. The company also announced plans to redeem all outstanding shares of Series B Preferred Stock on December 27, 2024.

Overall, Invesco Mortgage Capital's performance in Q3 2024 reflects a significant recovery in profitability, driven by strategic investment gains, despite challenges in net interest income and cash flow management.